UNRESTRICTED FUNDS:
CURRENT ASSETS:
Cash
Short Term Investments Accounts Receivable
Inventories Prepaid Expenses Unexpired Insurance Total Current Assets CURRENT LIABILITIES:
Accounts Payable Accruals
Amount Due Reserve Deferred Income
Total Current Liabilities Working Capital
OTHER ASSETS:
Deposits Advances
Total--Unrestricted Funds RESERVED FUNDS:
Funded
Building Expansion
Kiwanis International Bldg.
Total--All Funds (Net Assets)
1 9 7 6 1 9 7 5
$ 176,170 $ 224,003 400,000 300,000 434,439 410,069 305,908 269,901 48,771 56,463 38,809 35,915 1,404,097 1,296,351 81,004 128,441 77,203 58,314 32,271 16,139 626,398 638 J.76 816,876 841 ~70 587,221 454,481 36,950 32,575 25,490
62,440 27,577 60,152 649,661 514,633 309,984 313,313 245,228 211,075
1 1
$1,204,874 $1,039,022
REPORT OF BOARD COMMITTEE ON FINANCE
TO THE MEETING OF THE INTERNATIONAL BOARD OF TRUSTEES JANUARY 29 - FEBRUARY 22 1977
Date of Committee Meeting: January 29, 1977 Place of Committee Meeting: General Office
Present: Members - Stephen H. Hart, Jr., Hilmar L. Solberg Chairman - E. B. McKitrick
Staff Members - Thomas W. Fitzgerald, R.P. Merridew, L.A. Hapgood
The committee reviewed the financial policies as amende~ in May 1976, and specif- ically Item 17, Travel and the Per Diem Allowance.
Recommendation #1:
The committee recommends that the following be referred to the Board Committee on Laws and Policies for their implementation:
Page Bl4, Item 17 Travel
(1) Members of the Board and Past Presidents
(a) delete the following words in the first sentence:
•~y either airplane or railroa~'
"(and Pullman space if by railroad)"
add the following sentence to end of paragraph:
"Travel by air should be restricted to coach, and
travel by railroad shall include Pullman when required."
In addition, the current rate of per diem should be increased $10 across the board, plus an additional $5 for the President's wife, and that this change be given immediate effect.
I move recommendation 1 be adopted and referred.
(adopted)
The committee reviewed the Summary Statement of Budget and Actual Income and Expenses for the period ended December 31, 1976 and 1975. In our review of the income, which amounted to $942,137 for the first quarter of this administrative year, we noted only a few areas where we have shown any significant change or increase from the previous year; processing fees, gross profit on the sale of supplies, and life member income. With the exception of a slight decrease in magazine advertising, all other areas of income are fairly comparable to last year.
On the other side of the ledger the expenses amounted to $817,696 compared to $836,054 at the same time last year. Unfortunately this is not an accurate comparison because there have been some adjustments in our disbursement patterns this year. Tne attached statement indicates that our expenses are less for the first quarter, when in fact as anticipated, they are running approximately $25,000 ahead of last year. After the January statements are prepared, the comparison between the two years should be more realistic.
- 2 -
Therefore, the excess of income over expense of $124,441 should be reconciled down to a figure of approximately $95,000, which still compares favorably to last year. However, since we are not requesting an adjustment in our rate of dues in Dallas, we will face a strong possibility of running a deficit next year. 1
This is further enhanced by the attached schedules which forecast magazine income and expense over the next four years. Schedule 1 reflects the worst financial picture we can expect. Schedule 2 reflects the best; hopefully it will end up somewhere between both schedules. Therefore, it would appear that preparations should be made for presentation of a dues increase at the Miami Convention in 1978.
In our October report we indicated that we would be making specific reconnnendations concerning budget adjustments for the 1976-77 administr.ative year. In order for us to better prepare ourselves for the months ahead, the connnittee is in agreement that the adjustments for this administrative year should be made at this meeting, rather than in June.
The reconnnended budget adjustments for this administrative year were reviewed. We are requesting a net increase of income in the budget of $75,000, and a net increase in the expenses for this year's budget of $85,592. The budgeted net income for this year will be reduced by $10,592, which will leave us a balance of $13,874. This further substantiates the fact that with another year of inflation and normal price increases, that there would be no way that the current income could support our operation beyond the 1977-78 administrative year.
Reconnnendation #2:
The connnittee reconnnends that the budget adjustments as presented be approved as the final budget adjustments for the current administrative year.
I move reconnnendation 2 be adopted.
(adopted)
At the October meeting of the Board, charters for the clubs listed below were revoked, and the clubs indicated had accounts receivable balances at that time. The total amount to be written off of $6,316.11 consists primarily of dues and magazine sub- scription billings, with the exception of $482.00 from the sale of club supplies.
KIWANIS CLUB OF:
Central Baldwin, Robertsdale, AL Kalgoorlie, Australia
East Hollywood, California
Garden Grove-Central, California Lynnwood, California
Miracle Mile, Los Angeles, California The Rim of the World, Running Springs, CA Santa Ynez Valley, Solvang, California Lahaina, Hawaii
Halfway-Williamsport, Maryland Galax, Virginia
Vienna, Virginia
Newland, North Carolina
Washington-on-the Pamlico, NC Etobicoke-North, Ontario
AMOUNT
$ 95.00 175.00 48.80 66.50 42.75 85.50 118. 75 71.25 72.79 49.50 247.15 52.15 376.80 99.00 66.50
Kiwanis Club of:
West Citrus County, Homossassa Springs, Fl Cumberland, Atlanta, Georgia
East Point, Georgia Mableton, Georgia Snellville, Georgia
Fex River Grove-Cary, Illinois Moundridge, Kansas
Paola, Kansas
Knott County, Hindman, Kentucky Powell, Tennessee
Morehouse, Bastrop, Louisiana West Jefferson, Louisiana Kalamazoo, Airport, Michigan Bismarck, Missouri
Lake Saint Louis, Missouri Malvern, Arkansas
Ozark, Arkansas
Plainville, Connecticut Ashland, Massachusetts Ilion-Breakfast, New York Plainedge, New York
Plainview, New York
Pike County, Waverly, Ohio Cornelius, Oregon
Camano-Coho, Camano Island, WA Southwest Tacoma, Washington Central Township, Monaca, PA Ambos Nogales, Arizona
El Mirage-Surprise, Arizona Scottsdale South, Arizona
Highland, Albuquerque, New Mexico Capital City, Austin, Texas
Dallas-Central, Texas Frio County, Texas Greater Marshall, Texas Honey Grove, Texas Santa Fe Area, Texas Sunnyside, Utah Mexico, D .F., Mexico Puebla, Puebla, Mexico TOTAL
Recommendation #3:
Amount
$175.00 71.25 72.90 113.25 89.25 95. 70 61.75 44.00 236.25 104.50 95~00 92.00 83.15 144.00 236.25 36.00 19.00 78.75 76.00 225.25 6L75 174.50 93.00 201. 25 113. 7 5
33.25 56.00 89.75 74.25 222.00 101. 80 88.00 122.40 167.15 44.00 189.75 61.00 76.00 185.00 344.82
~316.11
The committee recommends that the accounts receivable balances for the clubs listed above, totaling $6,316.11, be written off.
I move recommendation 3 be adopted.
(adopted)
- 4 -
The quarterly reports of Key Club International and Circle K International were reviewed, found in order, and approved. It was noted that Key Club income for the first quarter amounted to $126,000 compared to $113,000 at this same time last year.
You will recall that this year Key Club International dues have increased 25% over last year, or fifty-cents per member. Taking this into consideration, a more valid comparison would reveal that the membership dues for Key Club are running somewhat behind last year's pace.
Circle K dues were also increased for this year. The sponsorship fee was raised from $100 to $120. However, the comparison of Circle K income not only reflects the dues increase, but also reflects a slight gain in collections over the last twelve months.
The connnittee considered the reconnnendation from the Past Presidents' Connnittee con- cerning the treatment of life member income. From the start the Board was in agree- ment that income from life members would help us offset a dues increase at that par-
ticular time. This was accomplished, as you know, and the accounting method used was to record life member income in the year in which it was received. The Finance Com- mittee is in agreement that we should continue recording the proceeds from the life member program in this manner.
Reconnnendation #4:
The committee recommends that we continue to credit the income from the life mem- ber program to the year in which it is received, and that this amount be recorded as a separate item of income in our annual printed financial statement, as has been done in the past two years.
I move recommendation 4 be adopted.
(adopted)
The committee discussed the current and future financing problems of our Comprehen- sive General Liability Insurance Program. As you all know, insurance costs are sky- rocketing for this type of coverage; in addition insurance companies are somewhat reluctant to continue this type of coverage.
Recommendation #5:
The committee reconnnends that the proposal from the Board Committee on Laws and Policies concerning the drafting of two proposals for delegate approval in chang- ing the current insurance program be drafted as follows:
(1) remove the cost of this insurance out of the revenue article and into a separate bylaw and that a maximum premium per member be indicated, or (2) write in the cost of the insurance when it is determined.
I move that recommendation 5 be adopted.
(adopted)
The committee reviewed the artwork and cost figures concerning an award for the wives of our distinguished governors. The staff presented a .charm which has been
appropriately designed to match the governor's award, and we are in agreement that the charm should be manufactured, and the program implemented as soon as possible.
The staff has indicated that the Jamaican clubs within the Eastern Canada and the Caribb.ean District are experiencing restrictions which will not pennit them to send money out of their country for the payment of International obligations. The committee agreed that the staff should make the necessary arrangements ranging from establishing a bank account in the name of Kiwanis International in Jamaica, to hiring a fiscal agent to make the collections. We recommend that the staff use their discretion in this matter, keeping in mind that we should pursue the most feasible and economical method i11 the collection of these funds.
The staff reported on the progress made since the October meeting involving our Task Force Committee on Electronic Data Processing. We have been advised that formal bids for hardware have been received from three vendors, and that this in- formation will be assembled and condensed. Then as previously approved, services from a systems expert in this area will be utilized and a subsequent meeting of staff, systems analyst, and the members of the EDP Committee can be arranged in order to finalize and present a report to the Finance Committee on the procurement of "online" type hardware.
The staff also submitted a report on the General Office overhead expenses, which heretofore were charged primarily to income-producing departments. The proposal for a change in the reallocation of office overhead expenses is included in the proposed budget adjustment schedule attached to this report. The committee is in agreement
that with these adjustments in the monthly financial statements, the reader will be able to better comprehend the costs for each specific department in the General Office. This will also lead toward our goal of a unified budget for the entire organization.
Also reported was progress in simplifying our financial statements. The committee reviewed a quarterly budget type statement, and we are in agreement that we should first expose the committee and the General Office department heads to this type of statement before making a specific recommendation on it. After the next quarter or so, if we find that this in fact does help clarify the financial picture, then we will request your approval to make this change.
The committee reviewed the current financial policy for expense reimbursement when official travel is made by automobile. We have requested the staff to make a report to us at the May meeting, and at that time the committee will make a rec.ormnendation concerning the allowable mileage rate.
Respectfully submitted, STEPHEN H. HART, JR.
HILMAR L. SOLBERG
E. B. McKITRICK, Chairman
KIWANIS INTERNATIONAL
SUMMARY STATEMENT OF BUDGET & ACTUAL INCOME & EXPENSES PERIOD ENDED
DECEMBER 31
1 1976&
1975UNEXPENDED
BUDGET ACTUAL ACTUAL ACTUAL
1976-77 1976-77 1976-77 197 5-7 6 INCOME:
Dues-General $
1,256,385 $317,867
$938,518 $320,258
Dues-overseas Extension
264,500 66,125 198,375 65,625
Charter Fees
27,~00 8,050 19,450 6,150
Interest
40,000 10,000 30;000 13,191
Liability Insurance (Net)
3,000 1,500 1,500 1,461
Life Membership
150,000 14,444 135,556 8,150
Processing Fees
205,000 51,326 153,674 32,521
Magazine Subscriptions
821,100 203,617 617,483 202,563
Magazine Advertising
210,000 37,724 172,276 49,195
Gross Profit-Sale of Supplies
455,000 209,118 245,882 161,040
Convention Registration Fees
352,000 30 351,970
(150)
Convention Dues
72,615 18,154 54,461 11,125
Mailers
7,000 3,038 3,962 3,293
Other
--- 1,144
(1,144) 325
Total Income
3,864,100 942,137 2,921,963 874,747
EXPENSES:
Board-Council-Comm. Ad.min.
338,850 102,023 236,827 113,730
Executive
193,448 49,227 144,221 45,669
Off:i.ce Management
· 242,570
L~3,246 199,324 63,152
Public Relations
69,576 15,967 53,609 14,584
Overseas Extension
246,970 45,680 201,290 37,247
Field Service
356,478 86,877 269,601 83,388
Records
&
Data Processing104,096 26,060 78,036 22,127
Program Development-Club Serv.
170,421 47,022 123,399 38,170
Circle K
38,323 - 12,831 25,492 6,411
Key Clubs
49,967 24,693 25,274 16,656
Bureau of Accounts
106,504 7,489 99,015 6,302
Publications
161,6.16 29,141 132,475 61,917
Magazine
936,560 202,133 734,427 186,532
Supplies
399,640 105,334
29L~,306 106,358
Convention
424,615 19,973 404,642 33,811
Total Expenses
3,839,634 817,696 3,021,938 836,054
EXCESS OF INCCME OVER EXPENSES